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Last updated on 5th January 2024
India's real estate sector has shown impressive growth in the Asia Pacific (APAC) region, largely due to significant foreign investments over the past five years. A recent report by Colliers, a Canadian-based professional services and investment management firm, highlights that India's real estate market has become a prime choice for foreign investors since 2018.
The Global Investor Outlook report by Colliers reveals that India's real estate sector attracted foreign investments totaling $23.3 billion (approximately Rs 193,000 crore) from 2018 to September 2023. Office spaces in India were the most popular, securing $11.4 billion in foreign funds. The residential sector received $2.6 billion, mixed-use properties garnered $2.9 billion, and the industrial and warehousing segment attracted $2.5 billion. Additionally, alternative assets, including data centers, life sciences facilities, senior housing, holiday homes, and student housing, drew $2.3 billion. The retail sector also saw substantial investment, receiving $1.6 billion.
The trend indicates a growing interest among investors in increasing their real estate holdings, with nearly 60% of APAC investors anticipating that robust regional economic growth will positively impact the real estate market. Notably, the influx of investments in India has been led by investors from the USA and Canada, along with those from within the APAC region.
“As more established markets start to stabilize, investors are growing more confident about extending their search for opportunities in growth markets. This is particularly apparent in India, which is expected to remain one of the fastest-growing major global economies, led by private consumption and capital formation. The opportunities to invest in India continue to spread across office, logistics, private credit, residential and data centres.”, said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.
As per Colliers’ analysis, while the geopolitical outlook poses an overall downside risk to the investment market globally, “India continues to demonstrate resilience through its high growth trajectory”. Investments into India continue to grow annually and in 2023 it has witnessed a strong 27 per cent year-on-year growth so far (till end-September). “This is steered by long-term confidence in core asset classes and emerging avenues for diversification. From the lens of global and APAC investors, the Indian real estate market currently offers stable returns paired with attractive pricing, better valuations, and higher yields,”, it noted.
“2024 definitely looks more positive than 2023. There’s a lot of pent-up equity looking to find a home,” said Chris Pilgrim, MD, Global Capital Markets, Asia Pacific at Colliers. He pointed out that the depth of capital in most Asian markets had to diversify, and real estate would be one of the sectors in which allocations are set to rise.
Published on 4th December 2023